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Do Regulations Really Kill Jobs Overall? Not So Much

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Rep. Darrell Issa, R-Calif., who's the chairman of the House Oversight and Government Reform Committee, solicited opinions from businesses, trade groups, and experts on which regulations kill jobs. (TIM SLOAN/AFP/Getty Images)

It’s become a mantra on Capitol Hill and a rallying cry for industry groups: Get rid of the job-killing regulations. In recent days, with nearly every one of the GOP presidential candidates repeating that refrain, the political echo chamber has grown even louder. Earlier this month, President Obama also asked the Environmental Protection Agency to back off more stringent ozone regulations, citing the "importance of reducing regulatory burdens" during trying economic times.

But is the claim that regulation kills jobs true?

We asked experts, and most told us that while there is relatively little scholarship on the issue, the evidence so far is that the overall effect on jobs is minimal. Regulations do destroy some jobs, but they also create others. Mostly, they just shift jobs within the economy.

“The effects on jobs are negligible. They’re not job-creating or job-destroying on average,” said Richard Morgenstern, who served in the EPA from the Reagan to Clinton years and is now at Resources for the Future, a nonpartisan think tank.

Almost a decade ago, Morgenstern and some colleagues published research on the effects of regulation [PDF] using 10 years’ worth of Census data on four different polluting industries. They found that when new environmental regulation was applied, higher production costs pushed up prices, resulting in lost sales for businesses and some lost jobs, but the job losses were also offset by new jobs created in pollution abatement.

“There are many instances of regulation causing a specific industry to lose jobs,” said Roger Noll, co-director of the Program on Regulatory Policy at the Stanford Institute for Economic Policy Research. Noll cited outright bans of products—such as choloroflorocarbons or leaded gasoline—as the clearest examples.

That’s supported by recent data from the Bureau of Labor Statistics, which shows employers attributing a small fraction of job losses to governmental regulations. In the first half of 2011, employers listed regulations as the cause of 0.2 to 0.3 percent of jobs lost as part of mass layoffs. But the data doesn’t track the other side of the equation: jobs created. 

“The key point is that regulation affects the distribution of jobs among industries, but not the total number,” said Noll.

That point is also echoed by Richard Williams, a former FDA official who’s currently Director of Policy Research for the free-market oriented Mercatus Center at George Mason University. (The center has ties to Koch Industries, an energy conglomerate that’s spent tens of millions lobbying against regulations. Koch’s chairman and CEO, Charles Koch, sits on the Mercatus Center’s Board of Directors.)

Earlier this year, Williams sent a letter [PDF] to Rep. Darrell Issa, who’s been soliciting opinions from businesses, trade groups and experts on which regulations kill jobs. Williams wrote: “The economic literature suggests that the effect of regulations is likely small at the macro level. However, at the micro level, the effect of regulations on job creation and sustainability of particular businesses can be great.”

In a phone conversation, Williams expanded on his point. “It’s certainly true, as people say, that regulation does create jobs,” he said. “It requires firms to do something that they’re not doing now, so often they need to hire.”

But according to Williams, the more important question is whether the jobs created by regulation are good jobs or more valuable jobs—a question he says hasn’t been adequately addressed by government analysis or by academic research.

Susan Dudley, the former White House regulatory chief under President George W. Bush and now director of the George Washington University Regulatory Studies Center, reiterated that point.  Regulations can be counterproductive even if they result in more hiring.

“It would be easy to think of a regulation that ‘created jobs’ that didn’t benefit society,” Dudley said via email, such as “requiring that all construction be done with a teaspoon.”

In other words, counting jobs gained or lost is too narrow a prism through which to evaluate whether a regulation is good or bad. The real question is whether it improves waterways or lengthens lives or protects the public as promised.

“The issue in regulation always should be whether it delivers benefits that justify the cost,” said Noll. “The effect of regulation on jobs has nothing to do with the mess we’re in. The current rhetoric about regulation killing jobs is nothing more than not letting a good crisis go to waste.”

Richard Ordowich

Sep. 21, 2011, 2:18 p.m.

It appears that our politicians on both sides pander to the simpletons amongst us. First they appear to be able to focus on only one major issue at a time ; the mortgage crisis, the debt, jobs, big government or regulations. They then suggest solutions to the current major issue that ignores the complexity or systemic nature of the problem. 

I can’t determine if the politicians themselves are simpletons and can only retain one thought at a time or they perceive the public is comprised primarily of simpletons but the result is the same; ill conceived, biased, myopic solutions.

If only someone amongst them would explain to the public that the problems we are facing are the result of many variables such as technology, globalization, competition, and social issues that have been evolving over decades.  Then perhaps they could address the major challenges systemically and with forethought. Unfortunately with our current politicians “the lights are on but no one’s home”.

Onerous regulations don’t cost jobs … try telling that to the thousands of South Carolinians who won’t be able to put 787’s together.

Regulations impose a barrier to entry into the marketplace. Business licensees, zoning issues, IRS codes, workman comp regulations, business site leases, environmental impact studies, they all add up. If you don’t have the money to deal with these you are effectively denied access to the marketplace or driven from it bit by bit. The tax code alone has gone from 25,000 pages in 1980 to 75,000 page today. According to the Office of the Federal Register, in 1998, the Code of Federal Regulations (CFR), the official listing of all regulations in effect, contained a total of 134,723 pages in 201 volumes that claimed 19 feet of shelf space. In 1970, the CFR totaled only 54,834 pages. The General Accountability Office (GAO) reports that in the four fiscal years from 1996 to 1999, a total of 15,286 new federal regulations went into effect. Of these, 222 were classified as “major” rules, each one having an annual effect on the economy of at least $100 million.

While a “job” may be created when a company has to comply with any of these regulations or rules, that position adds nothing to the productivity of the company and adds no value to it, only increasing its overhead. That compensation could have been better directed towards some productive end or towards further investment. This cumulative effect degrades a company’s overall profitability and ultimately its ability to weather economic downturns and overseas competition.

Regulations are like drops of rain in a hurricane with no one individual being responsible for the flood. When the latest rule or regulation comes from Washington or the state capital and the company says “I think we will expand production in Mexico this year instead of St Louis”. While the company hasn’t laid anyone off, its pretty certain that had there been a less stringent regulatory scheme, that expansion may well have taken place at an existing facility.

Just take a look at the regulations that were put in place on oil and gas by Obama. The price of crude just traded in a narrow range, while the price on the pump went form $1.81 (1/20/09) to $3.40 (9/21/11) in NM. This is taking $$$$$$$$$$ out of the economy ~ $30 for every 20 gallon fill-up. That is about $2,000 a year per VEHICLE driver and that has cost tens of thousands of service jobs!!

Mike H:
Granting that much of what you say is true, you’ve missed the larger point. Regulations for the most part are not whimsical and they are not enforced capriciously. They are in place for a reason or set of reasons and should be measured against two criteria: do they reduce the problem such as air pollution or tainted food or highway accidents, and are they worth the cost—more expensive manufacturing, say. The first is easy to determine, the second involves value and moral judgments that even mature societies find difficult to knit together and rarely fully satisfactorily.

A company that evades regulations by leaving the country is possibly immoral. Much of the outsourcing that’s occurred over the last several decades has been done to achieve lower wages and benefits, but also fewer regulations. One suspects this is a temporary imbalance, and that executives who have made such morally compromised decisions will be called to account.

This is sort of a ridiculous question.  But, then we have ridiculous people running our government who bring up these ridiculous points so I guess there is some necessity to go back and teach first grade concepts to society.  Regulation is necessary.  What would happen in any game without regulation?  Economics is a game.  It can be described through mathematical gaming theory.  We don’t have enough regulation or in some cases we have self-regulation as is often the case of corporatism.  Regulation is the RULE OF LAW applied to economics.  We are a nation of laws and not of men.  Or we were until men started deregulating our economy.  How’d that work out for you? 

It is red tape and unnecessary statist bureaucracy that we want to get rid of.  That red tape is often put there by corporations bribing our government.  In other words, fascism applies red tape in lieu of regulation in order to stifle working markets.  Being pro-business as shills for both political parties are, stifles regulation and working markets and replaces it with red tape to defeat merit-based competition in our economy.  This results in massive monopolies that have the money necessary to then capture our government through bribery. 

Obama’s health care reform bill was fascist red tape paid for by the health care industry.  Dodd-Frank financial reform was fascist red tape paid for by the financial industry.  Both protect massive bureaucracies by destroying merit, working markets and competition for American labor that would raise wages. 

Does regulation kill jobs?  Well, do rules to the game ruin your favorite sporting event or cause the collapse of sports-related employment?  It’s a silly question brought on by political fraud and corruption of our government.

Grim Reaper is right on target, here.  Good regulation helps keep markets stable and provides worthwhile opportunities.  Bad regulation keeps lawyers employed and wipes out the rest of us.

More and more, however, the latter sort is what appears, and the previous version of this article (a couple of weeks ago, as I recall) was an admission that employment of lawyers and regulators was the target.

There’s one issue, however:  Regulation has the force of law, but most of it isn’t law.  Regulations are dictated by executive agencies (the FDA, SEC, etc.), not deliberated by the legislature.  For that reason, I tend to oppose regulation as such, because it’s a more difficult process to manage; I’d much prefer a law be passed to regulate the activity, rather than it appear fully formed with no chance to fight it where it’s bad.

Wow where do you begin?

Before I retired I dealt with mostly regulation, safety and EPA regulations for a small company. That’s one reason I retired.

From this experience of over 20 years it went from a rather small part of the HR office to involving between 6 and 10 of us trying to keep track of all the various regulations sets that our company was expected to follow.

I don’t think we were ever 100% compliance it costs us as a company maney thousands of dollars that could have been used in other ways for expanding our business opportunity.

For extremely large companies, it’s just another expense, for small companies it is an impediment and a deterrent for expansion. We are overregulated and underserved by a government that is too bureaucratic. This costs big money and produces nothing!

Multiply this by hundreds of thousands of small businesses and the cost is astronomical.

The article above is hogwash, because I only scratched the surface.

There may not be proof that regulations kill jobs, but that’s not the same thing as preventing jobs from being created in the first place.

@ Mark

How unbelievably arrogant of you to question the conclusions of Miriam Wang and all the “experts” she spoke with. Why should we take your word, that of a seasoned industry specialist with decades of practical hands on experience, over the more estimable opinion of ivory towered eggheads like Miriam Wang and her gaggle of quote worthy “experts”?

How dare you!

E Brown….I am sorry, but you need to do a little more thinking on why the price of gas is ‘high.’  Or maybe just take a friggin’ basic macro econ class at your local college…..even sitting in on a high school level econ class might shed some light for , you clearly don’t know the very basics of supply and demand.  The price of gas has almost nothing to do with Obama and regulations. Instead, it has everything to do with supply/demand for oil…..things like supply disruption in Libya and other parts of the Middle East.  It also is effected by our flailing economy:  economy tanks =  less people/industry buy less gas…this causes a glut….remember when the economy crashed, the price was high and then it went down some?  That’s because people stopped buying as much gas and there was an over-supply….in response, producers stopped producing as much oil/gasoline, which tightens supply and causes the price to go up.  Meanwhile Libya and other events in the Middle East further tightened supply causing the price to go up even more.  PLEASE take some time to learn something about macro economics!

From Peter Schiff’s prepared remarks to Congress. Schiff is the CEO of Euro Pacific Capital.

In my own business, securities regulations have prohibited me from hiring brokers for more than three years. I was even fined fifteen thousand dollar expressly for hiring too many brokers in 2008. In the process I incurred more than $500,000 in legal bills to mitigate a more severe regulatory outcome as a result of hiring too many workers. I have also been prohibited from opening up additional offices. I had a major expansion plan that would have resulted in my creating hundreds of additional jobs. Regulations have forced me to put those jobs on hold.

I bet other oil companies were quite put out about BP’s criminal behavior. It makes them all look bad, and led to a temporary ban on drilling and cost them money, even though they played by the rules. The only companies that truly want no regulation are the ones that would put the entire industry or system at jeopardy in their drive to increase corp (and their personnel) profits.

Mark
My father, who struggled to start a manufacturing business in the Midwest in the 1960s, said much the same thing. His little front office had two engineers and four people dedicated to federal and state paperwork. He often went in on weekends just to catch up with red-tape requirements.

Sound, useful regulations are one thing. A huge, clumsy, grossly inefficient, dimbulb administrative bureaucracy is another, and it is a smothering death for our economy.

Is it possible to have one set of rules—or at least a streamlined set—for small regional businesses, and another one for giant global corporations?

Mike H
Is this your best attempt at dialog, or do you always think this way:

“ivory towered eggheads like Miriam Wang and her gaggle of quote worthy ‘experts’?”

Unless you are similarly qualified and offer specific, factual reasons to question the expertise of Wang’s experts—nonpartisan, far as I can tell, or even right wing (Williams)—please shut up and go away.

The flipside to “The real question is whether it improves waterways or lengthens lives or protects the public as promised.” is whether the jobs lost also “improve waterways or lengthen lives or protect the public”.

And I am always very cautious of claims by corporations and CEOs.managers of the costs of red tape. Experience to date (and I defer to Grim Reaper’s commentary) suggests that “owners & managers” outcomes are the first and only focus for a firm. Public good comes in a distant second, and only that when it serves the interest of the firm.

“Is it possible to have one set of rules—or at least a streamlined set—for small regional businesses, and another one for giant global corporations?”

Yes, they are called anti-trust laws.  No corporation in this country should ever be a giant global corporation.  It should be broken up or told it is going to be HIGHLY regulated if it doesn’t. 

Rules of engagement are rules of engagement.  We don’t need two sets of rules.  We need one set of rules that are easy to understand and affordable to comply with.  That is, unless you are dumping mercury out your back door or some similar impact.  Then, if it costs a lot of money to comply with regulations that benefit society, you pay the piper regardless of whether you are small or large.

As much as I like Pro Publica, I think the author of this piece relied too much on “experts” who may think that government regulation wasn’t an issue… and that may be true at the federal level.. but you have state regulations, county regulations, and city regulations that all add up.  I’m rather surprised that the author didn’t go into deeper research determining how serious the problems at the “micro” level hampers jobs being created or even lasting a year.  The survey done by the Labor Bureau does not appear to contain any data regarding failed businesses over the past year.  Personally I’d like to see estimates of what individual small business growth would be without some regulations.. but I imagine the estimates would be very, very subjective.

Most of what is said here is true and pertinent. (Notwithstanding the standard rhetoric and a bit of familiar oversimplification.) The apparent internal contradictions are canceled out by the complexity of the regulation issue. To add my accurate but vacuous position, regulation is good when and as needed and bad when overkill, ill-fitting, or outright corrupt.

If our elected representatives attempted to publicly argue the merits and demerits of regulation as a concept, instead of just dusting off their bombastic campaign rhetoric, this would come across disastrously for them and for their constituents. It is our job to look past all the smoke and see what politicians do with their mandate.

We can safely say that in the financial arena elected officials have made a huge mess. But if we look closely at the history, the mess has taken around twenty years to create. Congress after congress has run yellow and red lights in the course of serving their benefactors and getting re-elected. And as with most of us, they have not cleaned up after themselves.

To illustrate, there are regulations from the late 70s that made perfect sense in a climate of hyperinflation, that are still part of the banking system, and that there is no constituency to clean up. Take “usury”. You may have forgotten this biblical word, but current law still prohibits usury. The only reason my bank can charge me 30% credit-card interest in this period of 0% overnight funds rates is simply that regulations still decouple rates from currency and price fluctuations to protect banks from negative real interest. An early 80s regulation is now a loophole.

Remember the political fad of “sunsetting” of regulations? What ever happened to it? Oh that’s right, sunsettiing went out of fashion when President Reagan rescued the country from the failed presidency of Carter. Folks, we have to pay close attention and hold representatives accountable. We are being usurped when we do not.

Actually, I would say regulations do kill jobs.  Not in the way this article is talking about, though.  No…the reason they cost jobs is far more malicious; downright spiteful, in fact.

Because of the fact that a bunch of righties didn’t like the idea of government standing in defense of the American people and thus preventing those righties from working Americans to death for starvation wages…

Because those righties didn’t like government standing in defense of the American people and preventing those righties from poisoning the families of the American people with industrial toxins…

Because those righties didn’t like the idea of government making them help ensure that “labor” lived beyond its useful life to those righties…

Because of those reasons and any other effort the government makes to “promote the general welfare” that costs the righties even one thin dime,  those righties have been attacking America’s economy with the intent of making the American people desperate enough that they will accept the foreshortened and miserable lives those righties prefer “labor” to have rather than die immediately from starvation, disease, and exposure.

So yes, regulations have cost jobs - but only because a bunch of righties wish to be able to use the American people like tools that they can destroy whenever the whim takes them.

(No, I don’t feel bad about calling them “righties”.  I stopped caring about what species they actually are when I realized that they don’t see the American people as humans beings, but rather only as “consumers”, “labor” or “entitlement spending” - that is, either as something they can make money from or as waste to be disposed of. 

With intermittent usefulness as cannon fodder, of course.)

Though it seems the research is in its infant stages, the preponderace seems to be about offsetting jobs, from ‘one sde of the aisle, to the other side.’  I’ve read some government regulations and yes, some do seem unneccesary, but in the lon run, vital to our weel being as citizens.  There are those who believe all regulations should e done away with.  If that were the case, our drinking water would not be clean, our skies would be dark with pollution, kind of lik I hear Mexico City is for much of the summer and we would be paying much more for our vital goods.
Regulations are written by the Executive Branch and it was long before Obama was even heard of that their were regulations on the environment.

Peter Snowden

Sep. 21, 2011, 7:50 p.m.

2 things:  First, Marian Wang mislabeled her article conclusion on the influence of regulations on jobs—“Not so much”.  If you read the comments of her experts, they are saying at the micro level (where most jobs are created) the impact “can be great.”  And they also said there is not much research here.  How you go from there to “not so much” probably has to do more with here background or lack thereof—graduated Northwestern (great J school) in ‘07, then worked for Mother Jones.

Second, Grim Reaper and I are in total agreement that we are now in a moneyocracy where the “financial reform” legislation and “healthcare legislation”, for example, are largely written by lobbyists in exchange for large campaign contributions to both parties.  Congress repeatedly votes against the public interest and for the results desired by the large contributors, whether corporate or union.  They’ll take money from anyone.  However I suspect Mr. Reaper comes from the lefty camp with his comments about punishing any big multinational with regulations just for being big.  If we did not have Apple, Google, Boeing, and Caterpillar, if they had been destroyed by regulators, just picture how much worse off we would be.  We have many large responsible multinational companies.  Just look at surveys of good places to work.  Nevertheless, I think Reaper and I could agree that one major needed policy initiative is to separate free speech from campaign contributions.  Read the legal definition of bribery.  Contributions from PACs, bundlers, etc etc are all bribery.  The Supreme Court has chosen so far to protect these bribes as free speech with disastrous results to our country, to all of us.  The left has some initiative in this area about “free speech for people” which conveniently excludes unions from its scope.  And we have seen the results of their bribery.  The point is, free speech needs to be restricted to the original beneficiaries of the First Amendment, citizens of the United States.  Corporations and unions are not citizens.  They have the special interests of their owners/members in mind and that does not include the rest of us.  They have the money and so far they are winning.  Is this working for you?

Equating union money to corporate money is…ludicrous - and the Supreme Court knew that.

Unions democratically elect a slate of candidates to fulfill the wishes of their membership.  It is no different than if everybody in your local city joined a club and nominated a slate of officers to distribute their pooled dues to political candidates who would ensure that the interests of that city’s population were adequately represented in government.

But a corporation?  It takes money from consumers without telling those consumers that money will typically be used to attack them in their role as “labor”.

That is deception and fraud. 

Because of the interwoven linkages between corporate boards of directors which often feature individuals who serve upon the boards of many different corporations, many different corporations spend their money to pursue political goals desired by just a handful of individuals.

That is dictatorship by committee.

A corporation is not in any way, shape or form a democratic entity…it does not seek and will not permit the desires of its workers to influence the way that corporation uses its money to influence politicians - in fact, in most cases that corporation will use its money in attacks upon its workers; in attempts to lower the wages of those workers (e.g., the elimination of the minimum wage); in attempts to make both the workplace more dangerous for those workers; in attempts to make the America’s and the planet’s environment more dangerous for both those workers and their families.  Further, the corporations do not even poll their shareholders to permit them to influence the political activities of that corporation.

That is the antithesis of democracy, for that is totalitarianism.

And I have no doubt that the Supreme Court’s “conservatives” were quite aware that those would be the consequences of their actions; they were not, in fact, attempting to give corporations free speech (and so, bizarrely, free will), but rather to attack democracy by increasing the influence of a tiny minority far beyond what their influence should be in a functional democracy.

Make no mistake about it:  Those Supreme Court justices who inflicted Citizens United upon this country did so in a blatant attempt to destroy the nation envisioned by our Founding Fathers in 1776 - and they did so at the command of the American right who the American people see only in the public faces of the Republicans, the Tea Party, and the Libertarians.

(Note to self:  Stop getting hot while typing comments - it messes with your grammar and syntax something fierce.)

Morris Foutch

Sep. 21, 2011, 8:29 p.m.

Grim Reapers comment:  Having been a technical professional who dealt with numerous waste streams within the 50th largest company in the world at one time & who for some years held legal liability such that a very large bond was procured to indemnify myself and the company, I think the jobs vs regulation is extremely important. We live in a world populated, hopefully, by intelligent people who are often required to write and enforce environmental/workplace regulations. As mentioned, some over regulate and may impinge on employment; however, many under control resulting in pollution that someday has to be cleaned up by guess who: the taxpayer. The theme of the article is perfectly on the mark, some folks lose jobs while others gain new jobs in my experience. Let me mention the sources of my ethics: God, Some exceptionally knowledgable professional person, the Law and finally at times, the Situation at hand when no other guideline is available. We simply cannot allow bad crap to enter the air shed or foul our waters. We are better humans than this. Good article and very timely.

Mr. Snowden, if you knew half of what you think you know, you might actually be dangerous.  Amazingly, there are still dimwitted people who want to compare and contrast the illegitimate right versus left paradigm rather than right versus wrong.

Your perspectives on Apple, Caterpillar, Boeing, etc show how little you truly know.  All three of these companies stifle innovation because of the predatory positions their largeness allows.  Additionally, all three have rigged the rules to the game to stifle competition.  So, society suffers.  Finally, these companies and other large companies are able to pay outsized wages comparative to small companies for a few basic reasons.  1) They arbitrage labor and use sweatshop contractors.  Boeing has recently gone this path with development of the 777.  2) All three of these companies are benefactors or massive corporatist subsidies courtesy of taxpayers.  3)  They are able to rake in outsized profits because their outsized positions in the market place allow them to buy, shut out and stifle competition Thus they earn outsized profits courtesy of fascism or the intermingling of their political policies with their markets. 

Have you no understanding of how Apple has destroyed countless jobs by basically pirating and manipulating property rights of countless companies through iTunes? 

We have anti-trust laws for a reason.  Large companies create more hassles than any benefit they create.  If you had half a brain, you’d realize this.  Of course, that must be because you are a conservative.  You know, just like the Dixiecrats and all other forms of conservatism (tools of elites)  that has chaffed against democracy and equality since the Civil War.

Eight years of an anti-regulatory presidency, supported by an anti-regulatory Congress, shredded the regulatory system that had been developed to constrain the piratical tendencies of the anti-regulatory crowd on Wall Street.  The result was an unregulated raping of the economy and the society in search of individual wealth.  How many jobs were created by eight years of fervent, deliberate, coordinated deregulation? 

Regulation is our mechanism whereby we limit the ability of powerful individuals and groups to take actions that exchange widespread social harm for narrowly-focused profit or power.  We are a nation of laws, and those laws are made by and for the citizens, not corporations, not business executives, not union leaders, not entrepreneurs. 

Re-read the preamble to the United States Constitution.  “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America”.  We the PEOPLE (not the corporations, nor the banks, nor the unions).  A more perfect UNION (not anarchy).  Establish JUSTICE (not the law of the jungle).  Domestic TRANQUILITY (not economic warfare).  GENERAL Welfare (not the welfare of the richest and most powerful).  Blessings of LIBERTY (not enslavement to corporate greed).  For the UNITED STATES OF AMERICA (not just Texas, not just California).

We have fought and bled and died for these truths for over two hundred years, as Americans bound by a common vision and law.  The incessant attacks of the right upon the essential regulatory mechanisms of central government are nothing less than an attack on America and on Americans.  The inevitable end of these attacks on the very concept of American governance can end only in fascism and corporate dictatorship.  If you don’t believe me, try expressing free speech to a blueshirted TSA guard at the airport, and find out just how much the right wing has already stolen of your freedom.

Regulation protects me, protects my job, protects my family, protects my community, protects my lifestyle, protects my savings, protects my freedom.  To the degree that it saps profits, it only saps the profits of those who would seek individual wealth at the expense of society as a whole.  I don’t like every regulation - many of them are quite lame.  But we live in a Republic, and to live in a Republic we must accept that no one of us will ever agree with everything we collectively agree on. 

Until we started to de-regulate, I never thought my wealth, health, or freedom were threatened by external forces.  Now I fear.

Speaking of regulations, check it out:  The Republicans are moving to force the EPA to allow Americans to die from pollution if preventing that pollution might cost a corporation some money:

http://www.mcclatchydc.com/2011/09/21/124856/house-gop-bill-would-roll-back.html

I quote McClatchy:

“The amendment by Rep. Bob Latta, R-Ohio, would require the EPA to consider feasibility and cost when setting the amount of pollution in the air that’s acceptable. This change would negate a unanimous 2001 Supreme Court ruling that the Clean Air Act doesn’t allow the EPA to take costs into account when it’s setting air standards.

John Walke, an attorney at the Natural Resources Defense Council, wrote in a blog that the change would force the EPA “to set unprotective air quality standards for smog and soot and lead pollution that are at odds with health science, based on cost complaints by polluting industries.”

House passage of the TRAIN Act is considered certain.”

End of quote (and thank-you, McClatchy). 

Nice, huh?  What makes me laugh is the memory of that other Ohio Republican - Boehner - crying on “60 Minutes” about just wanting to ensure that America’s kids have the same shot at “the American Dream” he did.

Now here’s another Republican from Ohio trying to make sure America’s kids don’t live long enough to understand that the Republicans starting derailing their shot at “the American Dream” away way back during Reagan’s Administration.

GARY MULLENNIX

Sep. 22, 2011, 12:30 a.m.

Marian…of course they kill jobs because the enforcement of the regulations takes place via a tax paid bureaucracy that only absorbs money and generates no value in return. While the different employees make money, frequently at a much higher rate than those they are regulating, they do not work for a company who earns money and pays a portion of that in taxes.  It is all a cost.  If regulation was a generator of profit, private business would be in on it.  It kills jobs.  Period

David E. Shellenberger

Sep. 22, 2011, 12:31 a.m.

“Not so much?” No, much.

Most regulation is intended to serve the government and special interests. Regulation adds unnecessary costs and distorts and smothers economic activity. One effect is that it discourages the creation and expansion of businesses.

Jobs created as a result of regulation generally are wastes of resources. A healthy economy created by a free market is the only way to ensure a healthy job market.

Journalists who are unaware of this should try starting a business, and dealing with the nonsense government presents.

Richard McCargar

Sep. 22, 2011, 12:52 a.m.

I do enjoy hearing from “experts” most of whom were big-shots in the federal government.

As they continue to drive jobs overseas, they can just continue to have the federal government hire the displaced workers (not actually the displaced, but people who don’t mind working for the government).

Until there is no private sector at all.

Brilliant!

Yes, regulations cost jobs. No, the jobs that regulations create are generally not in the private sector and therefore add cost to the society. The article admits these facts. The point of the article is that in terms of jobs, this is not the entire story. My thoughts on the politics of regulation are in a previous comment. I conclude that the citizens need to pay attention to Congress because they often pass bad regulations and don’t kill ones that outlast the need for them. It is our job to clean house, so to speak.

I am back now because recent posts seem to presume that all or most regulations are bad. For example “. . . enforcement of the regulations takes place via a tax paid bureaucracy that only absorbs money and generates no value in return.” Of course enforcement of regulations creates value! Even profit, although *indirectly*. Some of you may be too young to remember the air and water pollution before EPA. Believe me, you do not want to go back to there. Where I live, in Seattle, Lake Washington runs top to bottom forming the east boundary of almost the entire city. Lake Washington used to be posted with danger, keep out signs around its shore. Air pollution on the eastern seaboard once killed large areas of woodlands and at times prevented people with breathing problems from even going outside. Some of you may not want to believe that good people need regulations. Think of it like this: Businesses have to be competitive. If you decide to spend money to clean up your waste, and your competitor saves money by just polluting, then your responsibility puts you at a competitive disadvantage. Regulations level the playing field. Some of you need to read *The Jungle* by Upton Sinclair. It might take care of some of your naivety about good people.

Graydon DeCamp

Sep. 22, 2011, 6:01 a.m.

Regulations might not DIRECTLY inhibit job-formation in the private sector, but the effect is every bit as damaging to the economy because every regulation imposes compliance costs that consume operating capital, thus preventing investment in new plant, new processes, new products, new services . . . and new employees. Estimates vary, but are not hard to calculate, and even conservative estimates run into the hundreds of billions of dollars a year in the US.
    For instance, my personal compliance cost for meeting IRS regulations in filing a simple 1040 each year is easily quantifiable: It is the sum of the time I spend compiling the required data (wages, fees, deductible expenses, contributions, medical bills etc etc) times an hourly wage rate, plus the fee I must pay an accountant to prepare the return itself because tax regulations and forms are so complex that ONLY a highly-trained professional can hope to understand them. In my own case, assuming a conservative $50 hourly rate, my compliance cost each year is on the order of $4,000, which in some years is more than my actual tax, and (worse) is $4,000 I will NOT be spending on products and services from companies with employees. Multiply that by 130 million-odd households and you have quite a sum every year—just for filing plain-vanilla 1040s.
    The only jobs regulations create are government jobs, which add almost nothing to the economy but increase the number of people the rest of us must support.

When I mentioned that latest Republican assault on the regulations brought into existence by the Clean Air Act above? 

(Details at http://www.mcclatchydc.com/2011/09/21/124856/house-gop-bill-would-roll-back.html

I was ticked…I hadn’t fully thought out the ramifications.

There are certainly other benefits to the Republicans and that tiny handful who are their true constituency:  If they succeed in gutting the Clean Air Act, then the coal and hydrocarbons (and those who burn same, like the utilities) industries can ramp up their emissions of particulates and toxins such as sulfur dioxide.

That is a preemptive strike:  Dirtier air will reduce the efficiency of solar energy conversion.  More acid rain will hasten the mechanical decay of wind turbines as well as solar cells.  And so on.

Those Republicans are some smart cookies, aren’t they?  They’re attempting to open a new front against the American people in which they not only subordinate American lives to executive pay and profits, but initiate the use of chemical warfare against both the American people and any industry which threatens the rate of wealth accumulation of the Republicans’ traditional funding sources, Big Oil and Big Coal.

And we can’t even use the Geneva Protocol to protect ourselves!  (At least, I don’t think we can.)

I must LOL @ MikeH and the uneducated posters on here. As a Chinese American I can tell you first hand what the other extreme side of lack of regulation is. Until I immigrated to America as a child, I thought clouds were suppose to be brown, that the sky wasn’t suppose to be blue but hazy. Regulations exists for both good and bad for a reason. The point of this article is that Republicans use the issue of government as a platform. And that’s simply just wrong, its not about less regulations but effective regulations. When we removed banking regulations guess what happened? Too big to fail. Business = Republicans = greed. They have to incentive to look out for your interests. Let’s all flash back to my childhood in 1990s China when literally you could do whatever you wanted.

I could literally build an factory in MikeH’s back yard. Why not? No building codes. I could literally pollute MikeH’s rivers, why not? No regulation. And there are many regulations that REPUBLICANS and BIG BUSINESS likes. Subsidizing the big Ag with punishing tariff on foreign farm imports. Why can’t I import corn ethanol without a huge tariff? Because Republicans from Iowa like pork going to there state.

If you think regulations period hurt jobs then MikeH is not a competent individual. Its about effective government not smaller government aka Crony Capitalism.

Steve, do you have the bill text?  I’m curious as to the specific details.

But back regarding the article, let’s all try this again…

Good regulations:  Don’t sue competitors for competing, don’t dump hazardous waste, don’t kill people, and so forth.  It doesn’t really matter how many jobs they cost, because companies are amoral and will do bad things if it’s cheaper than doing good things; arguably, they must do so.  They do likely cost jobs, but it’s worth it to save lives and diversity.

However, there are also bad regulations.  Intellectual Property is so bound up that publishing or manufacturing requires an army of lawyers to check every move, putting such companies far out of the bounds of a normal person.  Right now, independent iPhone app programmers (I’m not one, and won’t touch an Apple product with a ten-foot pole) are being sued by a company claiming to own a patent on “contextual upgrade” (having an “upgrade now!” button on the screen).  If you interview an actor and want to sell it with a clip of a movie he was in, you need to negotiate with everybody who appeared in the movie among others.  Because of the risk of lawsuit due to regulation (and Fair Use doesn’t prevent anybody from running up your legal bills), these are businesses reserved for the rich.  (Apple is currently suing Samsung in Europe over the right to make computers shaped like rectangles.  Can anybody here even begin to mount a defense against something that stupid?)

Having been a beneficiary of it, minimum wage is a nice principle, except for the part where I’m never going to hire someone to do work that makes me less than minimum wage back.  Instead, I’ll take someone who I already pay more and give them the work for free.  It means that the unskilled can’t get a job, because they can’t provide eight bucks an hour worth of labor.

And let’s not forget that we have treaties that make it a Federal offense to violate the regulations of OTHER countries, too.  It’s difficult enough to follow Congress’s “policy laundering,” and harder still to keep track of all the Agency regulations.  But apparently, everybody in the workforce is supposed to know every regulation in the world and whether it applies in the United States.

I’m not against intellectual property.  I’m not against the minimum wage.  I’m not against most of the other things the government tries to regulate at all.  I’m not a pro-corporate Libertarian or a filthy Hippie, I promise.  However, the amount of and approach to regulation is demonstrably damaging to the economy and removes jobs from it.

You can argue that these lost jobs are offset by lawyers, but what sane person wants more lawyers employed at the expense of people who actually do stuff?

Sorry, Steve, forgot your other comment:  I think the Bush administration proved that Geneva only applies to the extent that the offending government doesn’t rename the term.

So it’s not “collective punishment,” it’s “enhanced employer value extraction.”

Reaper
Agreed, two sets of regulations won’t solve the problem. We already have state and federal, and sometimes local, and states are quite literally all over the map. Some are as laissez faire as China in the 1990s (nod to Dave)—i.e., Texas—and others perhaps too restrictive, although no one leaps to mind. But the point that regulations and reporting requirements are easy for a big company to observe but a terrible burden for a small company somehow needs fixing. Maybe assign a portion of the existing regulatory machinery—no new hires!—to simplifying and making sensible exceptions for small businesses. My small-manufacturing-business father would have benefitted from a sympathetic bureaucrat with the power to say, “Yes, do forms A thru F but quarterly not monthly, skip G thru K entirely, and give us L thru S annually.” It would have allowed him to fire a paper pusher and hire an engineer or shop guy or salesperson.

I’m with you on the size of corporations. No company should be allowed to be bigger in revenues or employees than the smallest country—well, smallest viable country. Or pretty soon the Chamber of Commerce will usurp the House of Representatives, and render the United Nations General Assembly a tourist bureau.

James B Storer

Sep. 22, 2011, 10:53 a.m.

Grim Reaper, yesterday 9:52:  Great, informative, well- assembled comment, on the money.
  Philosophically tying discussion of “regulation” to jobs (creating or destroying) is totally inappropriate.  The purpose of regulation is not to serve as an employment agency.  In our two-party political system, one party constantly calls for “no regulation” unless, of course, the regulation is definitely advantageous to the large corporation.  That party very actively pushes for new or revised regulations in all the state legislatures in its perpetual quest (deliberately or through ignorance) to remake our nation into a fascist state.  Linking the topic to “jobs” is simply a useful tool (unrelated to the well-being of the nation) of their vast propaganda machine.
  Skartishu, Granby MO

Therese Kurtze

Sep. 22, 2011, 4:41 p.m.

“That compensation [for those who are hired to solve problems] could have been better directed towards some productive end or towards further investment.” 

Isn’t employing people at start-up companies a productive end?  And isn’t holding a financial stake in such companies also investing?  It seems to me that the real issue here is who stands to lose and who stands to gain as a result of shifts within the overall economy.  Economic players who have invested in existing companies are likely to be wealthier, and therefore more politically connected, overall than those involved with start-ups.  It seems that they just don’t like the idea that the economy as a whole is not dependent on their personal investments for success—hardly a principled reason for attacking regulations!

S/Os to Therese and so many more on the informative points. Regulation is an issue with lots of subtlety because of a host of factors. I don’t think any one of us thinks there are no bad regulations. Also I think everyone agrees that it is easy to “trojan horse” a bad regulation dressed up as a valid regulation. It is disappointing that some of us seem to think there is no valuable regulation. Or maybe a certain point-of-view goes is always associated with the idea “never appear to give a inch!” when they secretly realize that regulation is a necessity. I sure don’t know.

Let me just try this a different way: not only can you estimate the value of a given regulation, but it is easy to make the case that regulations are profitable. Some of you probably live in a community with a home-owners’ agreement or “covenant”. You pay an annual fee. Why? Aside from making your neighborhood nicer, it also raises your property value.

To James’s point, “Philosophically tying discussion of “regulation” to jobs (creating or destroying) is totally inappropriate..” As a data point, economists assign a dollar value to almost anything. For example, the fact that housing a convicted murderer for life costs less than executing him is all over Twitter today. A valid data point but hardly a sufficient argument against capital punishment. Supply siders (objectivists, libertarians, or whatever you wish to call these ideologues) go off the rails when they propose financial exchanges to convert these values: You will let me pollute the river if I pay the government the equivalent of the clean up cost. Philosophically, this is mind-boggling to me, not to mention much less efficient than throwing my ass in jail and shutting down the offending factory.

Richard McCargar

Sep. 22, 2011, 8 p.m.

As an apparently uneducated individual posting here….

I joined and ran a successful semiconductor company here in the U.S. during the 1980’s.  We started with design of full and semi-custom I.C.‘s, added a wafer fab, test and assembly departments employing about 300 people.

Over time, I added a test department in Berlin so that I could benefit from the tax breaks offered by the West Germans to place a facility behind the wall in West Germany.

I replicated those Marshall Plan era tax incentives in the Philippines, Singapore and Thailand. 

By the time we sold, I had hired slightly fewer than 3.5K employees around the world, and had seven factories.

It is quite likely that I have dealt with more countries regulations than you educated here on this thread. But excuse me if I’ve slighted anyone’s vast experience with government bureaucracies.

Every country has pols on the left and right, and irrespective of who was in charge in each country, they all had their hand out for largess to assist in cutting red-tape within their respective areas.

Bureaucrats suck the blood out of legitimate commerce and industry.

There is no question that regulations are necessary, but I doubt many of you have sufficient experience with them and their affects on any particular industry to have a notion of their damage.

They are always sold as necessary and innocuous, but are more often than not, nothing more than redistributing cash to pols associated with those in power at the time and in the place where zoning issues are decided.

But thank you for the cheap shots that anyone who disagrees with you must be ignorant. 

By the way…lol? Really?

Richard

I for one agree with everything you said. Well I should say everything but the couple of intentionally bombastic statements about blood sucking and ignorance.

You are moving the conversation a bit away from the gist of the article, but I believe the issue you emphasize is much more important: it is the corruption of the regulators and lawmakers at the heart of the problem surrounding regulation.

Richard,
Who would disagree with you?  Seriously?  Politicians are the bane of humanity.  I have had to help major companies comply with regulatory oversight and it is a mess.  And the red tape is so overwhelming that no small company could even survive.  The answer for every question as it pertains to the economy with every politician seems to be to add more red tape.  Our economic rules of law should be burnished in an economic constitution so that they are above the manipulation by those seeking power just as our rules of law regarding freedoms are contained in a constitution.  And those laws should not be determined by politicians who understand nothing about markets or business.  Especially when they are under the duress of massive corruption as our politicians are. 

How we ever got to a point where politicians “win” an election and believe that means they have the right to do whatever they can manage to do to our society as far as dismantling the rule of law, granting favors to cronies, ask to have their palms greased for business deals to pass, etc. is beyond me.

Politics is a relic of early civilization.  We need a form of self-rule that dismantles politics.

Most of these comments are rhetorical and not helpful.  I wrote health care regulations for decades and believe me, no one wakes up in the morning aching to launch a new regulation.  They are generally written for two reasons; a new statutory mandate or because a current regulation is so outdated private industry and everyone else wants a new one.  Whatever the content of a final rule, it must comport with existing laws to get past federal attorneys and the bean counters in the Office of Management and Budget (try to get past these people with rhetoric).  The process involves holding several large meetings to identify all of the major players both inside and outside the government at all levels; then smaller meetings (40-50 people) to outline what a new regulation must and could contain; then months of formal rulemaking and research during which affected parties may be contacted for more information; endless rewrites, briefings and cost benefit analyses; all culminating in the publication of a proposed rule in the Federal Register and on the Internet with 60 to 90 day public comment periods that may be extended.  Anyone can comment and all comments are carefully considered and often reshape the final rule.  I doubt if 1 in 100 people who comment on these excellent propublica articles have the faintest idea regarding how this process works or their right to actively participate.

Just think:  Wouldn’t need most regulations…wouldn’t need hardly any regulations at all..if the people who join and run companies actually were self-policing…self-regulating.

But nope…we’ve got literally millions of examples of those who join and run companies abusing the public trust in every area from toxic waste sites in America and around the world associated with mining and production to employees dying premature deaths because their work environment wasn’t properly filtered of the residues of manufacturing - all because those who joined and ran those companies could make a few extra bucks if they sacrificed a human life now and again.  (Industrial paganism, as it were.)

What amuses me the most is those who scream against regulation the loudest often have pasts that display evidence of their abuses.  Sometimes you don’t even have to look very hard:  Take the Koch brothers - who fund and run anti-American “people” entities like the Tea Party.  When reading their environmental record, you can discern the driver for and genesis of the Tea Party:

http://www.greenpeace.org/usa/en/campaigns/global-warming-and-energy/polluterwatch/koch-industries/koch-industries-environmental/

I truly wish that were not the case…that a link between those who despise regulations and behavior that makes regulation necessary weren’t so often present…

But that just seems to be how it is, as simple and obvious as the likelihood that your head getting wet indicates that it is raining.  It is not always true…but often enough to justify reaching for an umbrella.

What drives regulations, anyway?  People with power - because of their wealth, or the corporations they control - abusing people without power.  I.e., the same thing that drives the creation of criminal law:  Society protecting itself from predators. 

That is why the American right wants to destroy government:  Government interferes with their ability to prey upon those who have no power.

Government defends the powerless, so the right - in all of its facets, from Republicans, to Tea Party, to Libertarians, to those whom the ordinary American is unaware of but who actually control them all - sees government as their enemy and seeks its destruction.

lollll….so when you see someone attacking regulation, remember that rain analogy I used above…there is an extremely good chance that individual’s primary motivation is government thwarts their ability to prey upon you in your role as consumer or labor.  Or, they attack because government inhibits their ability to compromise you at your most essential level:  You are an organism that requires clean air and water in order to survive…but keeping the air and water clean can inhibit profits, so they want the ability to destroy what you survive on and because of.

(They would claim, of course, that they were not attacking you personally...they just want to be able to pollute wherever and whenever; your death would be incidental.)

However, Steve, some regulations exist to ensure the elites make a fast buck.

Starting a radio station, for example, should merely be a matter of buying a transmitter, finding an open frequency in your area, and running your programming.  Instead, you need deep pockets for various licenses, special permission for the spectrum, lawyers to make sure you’re not stomping on copyright and paying “mechanical licenses” for any recordings you play, and so forth.  And don’t forget decency standards.

Opening a bank or insurance company should be a matter of having a lot of money and offering the service and having someone trusted audit your books.  Instead, it’s impossible for a mere mortal because regulations say otherwise.

Since you mention self-regulation, it’s worth noting that it has worked in the past, in cases where the threatened regulation was censorship.  The Hays Code, the MPAA ratings, and a handful of other systems exist because Congress decided that freedom of expression was only worth protecting if it was regulated.

Copyright regulation itself, by following the inane European model, means that millions of out-of-print books and movies will vanish—literally disintegrate—before anybody is allowed to use them.  I’d say that’s a very damaging form of regulation, possibly worse than censorship in the grand scheme.

Again, my point isn’t “regulation is bad” any more than pointing out ineptly-written traffic laws would be approving of murder.  But just because some regulation is needed doesn’t mean that all regulation should be supported, especially when the regulators aren’t subject to much oversight and can be corrupted by private interests.

John, did you notice that every regulation you held up as an example inhibits someone from making money?  And not just “someone”, but rather those who have significant wealth to start with? 

Even copyright protection primarily serves to protect an individual…its elimination would serve larger entities who could them mass produce that individual’s works and pocket all of the proceeds, cutting the original thinker and creator out of the loop entirely.

I do believe that you just concealed a quest for the elimination of regulations that do not benefit the elite inside an argument designed to lead the reader to believe that you want to eliminate regulations that benefit only the elite.

Speaking of radio…I will provide a couple of links regarding the licensing startup costs so that the reader may ascertain if your argument is smoke or mirrors

http://www.prometheusradio.org/startup_costs

prometheusradio.org/Apply_LPFM_License

I have a few regulations that ought to be eliminated, as they generate huge, bloodsucking, wasteful, and idiotic bureaucracies, crammed with lawyers and other parasites.

Prohibition on Murder.  Think how much more efficient our government would be if we didn’t bother with this one!  Think of the reduction in attorneys!  Think of the reduction in prison costs!  Think of the boundless opportunity to Correct the Thinking of the Wayward!  This is a regulation that generates no wealth, supports an immense government bureaucracy, and burns endless tax dollars in enforcement.

Prohibition on Arson.  Think how much more competitive our corporations would be if they could just torch their neighbors!  Never mind advertising, or sales specials, or inventory control, or finance - just get a bucket of ligher fluid and toss a match - no more competition!  Think of how much we could save in firefighting costs!  Those lazy, good-for-nothing firefighters sit around all day, feeding at the public trough, and rarely, if ever, exercise the skills that we pay so much for.  If we were just to get rid of the Arson regulations, we could get rid of this terrible burden on our deprived taxpayers!

Prohibition on Child Enslavement.  This was probably the WORST invention of the 20th century.  Corporate productivity absolutely crashed when we stopped enslaving children.  They were so productive, so maleable, so cheap to maintain, so expendable!!  If we were to just enslave the poor children and the orphans, we could eliminate illegal immigration over night!  Kids are lower to the ground - they would be great at picking crops!!  We wouldn’t need a border patrol!  We wouldn’t need schools!  We wouldn’t need all these welfare programs for poor snot-nosed little brats who have no other economic value.

Prohibition on Reckless Driving.  Think of the COLOSSAL waste of money and resources generated by the prohibition against driving as fast as you want, wherever you want, whenever you want.  Our highways are twice the size they would need to be if we just allowed anyone to drive on either side of the road.  Bridges would be lighter, roads narrower and easier to maintain, and there would be no point in wasting money on pesky insurance premiums.

Let’s cut to the chase, shall we?  Regulations are just laws.  “Regulations kill jobs” is synonymous with “Laws kill jobs”.  Regulations don’t kill jobs - business executives kill them.  I’ve been a capitalist businessman all of my adult life.  I’ve created jobs and I’ve eliminated jobs.  On the whole, our regulatory framework gave me the confidence to invest on a level, civilized playing field.  I’ve never been prevented from making a decent profit by regulations, and neither has anyone else.  If you can’t make a decent profit while obeying the law, stay out of business.  Better yet, stay out of America.  Antarctica has no government bureaucracy - check it out!

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